PPAs for 5,000 MW in the pipeline

KATHMANDU, June 17: Hydropower producers are waiting for the signing of the power purchase agreement (PPA) with Nepal Electricity Authority (NEA) for various hydropower projects of nearly 5,000 megawatt of electricity. According to Shailendra Guragain, president of Independent Power Producers' Association of Nepal (IPPAN), nearly 40 hydropower projects are preparing to sign the PPA with the NEA. Similarly, PPAs for other 70 projects expected to generate a total of 2,838 MW have already been signed and these projects are under construction and will come into operation in the near future, according to IPPAN officials.

Leaders of independent power producing companies are optimistic about the possibility of meeting the government target of 10,000 MW of electricity within 10 years, or by 2026. "So far, we are in the direction toward the target set by the government. The goal of 10,000 MW in 10 years is gettable if we move ahead in speed," Guragain told Republica. Currently, hydropower projects of installed capacity of 925 MW are already online. He also said that developers are carrying out the feasibility study of various hydropower projects of the total capacity of nearly 4,000 MW. Power producers say that their focus would be now on the export of the surplus energy. However, there are also bottlenecks that may hit the power generation plans.

"The major obstacles have been the forest clearances and the land acquisition in the project areas. These problems may delay the projects and power generation if they are not swiftly addressed by the authorities," added Guragain.

He also said that they have become optimistic about the possibility of meeting the electricity generation target also due to the availability of financing opportunities in recent years. "As banks have raised their capital in last one or two years, they are more open and willing to finance hydropower projects," he said.

Power producers also urge the government to implement their 99-point memorandum that they had submitted last year to the government. They say that the 99-point memorandum could be a roadmap for the hydropower sector. Referring to the new target set by the government in the budget speech for the upcoming fiscal year, Khadga Bisht, former president of IPPAN, said that such frequent changes in the target risks diverting the plan pursued to meet the earlier target. While there was a target of 10,000 MW set by the government last year through its Energy Crisis Management Action Plan, the then Finance Minister Krishna Bahadur Mahara announced a new target of 17,000 MW in his budget speech for the upcoming fiscal year 2017/18.